A Clear Blueprint for Implementing Innovation at a Large Scale by Steve Blank

How to Successfully Deal with Disruption: Lessons from a Fortune 50 Company

A Fortune 50 company with a 100+ year legacy faced a daunting challenge – a new and powerful competitor with advanced technology, more money, and more people appeared seemingly out of nowhere, attempting to grab customers and market share. The company described the threat as “existential to their survival” and mobilized the entire corporation to come up with new solutions. In this article, we’ll explore how they tackled the challenge.

The Scale of the Problem

Dealing with a new and powerful competitor required the company to think about multiple areas in multiple dimensions. They needed to embrace new technologies, convert existing manufacturing plants to a completely new set of technologies, bring on new supply chains, become present on new social media and communications channels, connect with a new generation of customers who had no brand loyalty, use the new distribution channels competitors have adopted, make the transitions without alienating and losing existing customers, distribution channels, and partners, and motivate their most important asset – their people – to operate with speed, urgency, and passion.

Tsunami Initiative: The Response

To address the challenge, the company organized a biennial “Tsunami Initiative,” which involved all the leadership involved in the corporate-wide initiatives to out-innovate their new disruptors. They called it the “Tsunami Initiative” to emphasize that they were fighting the tidal wave of creative destruction engulfing their industry.

The company had hired a leading management consulting firm that helped them select 15 critical areas of change the Tsunami Initiative was tasked to work on. The co-leads overseeing the 15 topic areas had organized several hundred people from across the company: engineering, manufacturing, market analysis and collection, distribution channels, and sales. The teams had to brainstorm with each other, and over a thousand more were working on the projects in offices scattered across the globe.

Challenges in Requirements Gathering

While the subject of each of the 15 topic areas had been suggested by the consulting firm in conjunction with the company’s corporate strategy group, several requirements did not seem to have a root cause. For some requirements, it seemed that the corporate strategy group was delivering problems as fixed requirements rather than exploring the problem space themselves. With all of the requirements fixed up-front, instead of having the freedom to innovate, the topic area action teams had become extensions of existing product development groups, getting trapped into existing mindsets and likely producing far less than they were capable of.

Common Framework

To address this issue, we suggested that the company offer the topic action team leaders and their team members with a simple conceptual framework and common language. This would allow the teams to know when and how to “ideate” and incorporate innovative ideas that accelerate better outcomes. The framework would use the initial corporate strategy requirements as a starting point rather than a fixed destination.

The Framework

The framework we suggested starts with “unvalidated” problems, which are initially in the bottom right box. Teams would use a customer discovery process to validate them. Once the problems are validated, teams move to the box on the bottom left and explore multiple solutions. Both boxes on the bottom are where ideation and innovation-type of problem/solution brainstorming are critical. At times this can be accelerated by bringing in horizon 3, out-of-the-box thinkers to lend their critical eye to the problem/solution.

If a solution is found and solves the problem, the team moves up to the box on the top left. But very often, the solution is unknown. In that case, we suggested having the teams do a “technical terrain walk.” This is the process of describing the problem to multiple sources (vendors, internal developers, other internal programs) debriefing on the sum of what was found. A terrain walk often discovers that the problem is actually a symptom of another problem or that the sources see it as a different version of the problem.

Conclusion

Dealing with disruption requires a company-wide effort and a pivot in culture. To succeed, a company must do more than come up with one new product; it must pivot the entire company. The company must have a common framework and process, so that teams can deeply understand the problems, figure out whether the problem is a symptom of something more important, and understand whether the problem is solvable immediately or requires multiple minimum viable products and more R&D. Finally, the company must allow teams to innovate and be agile by getting out of their buildings and comfort zones and speaking directly to customers, stakeholders, and beneficiaries.